Entering a huge market with a differentiator

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Today I have a bootstrapper who entered a crowded market but some how he’s making it work. I want to find out how he did it.

Michael Martocci is the founder of SwagUp, an API-first platform to create, automate, and distribute high quality branded swag, across all teams and use cases.

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Michael Martocci

Michael Martocci

SwagUp

Michael Martocci is the founder of SwagUp, an API-first platform to create, automate, and distribute high quality branded swag, across all teams and use cases.

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Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs for an audience of entrepreneurs. And, uh, one of my past guests is the founder of micro acquire. It’s a place where you can go and buy and sell companies. And I’ve become friends with the founder I’ve invested in micro acquire, um, and.

He sent me a text message and he said, Andrew, we’re creating this content business. We’re going to take on a tech crunch, but we’re going to focus on bootstrappers. I said, great. And then as he featured this one company swag up, he texted me and said, Andrew, you’ve got to talk to this founder. And I said, why?

He goes, look at the story is a bootstrap company in the business. Of swag, which swag stands for stuff we all get. Right. Am I right about that? Michael?

Michael: It’s one of, one of the interpretations.

Andrew: It’s like a foul word that, that the S usually stands for, but basically we’re talking about stuff that that’s everywhere and this guy, Michael, whose voice you just heard? Michael mark. He created a new business in this space that is doing huge. And so the more I heard about it from my buddy gas, the more I said, yeah, I got to get this founder on here.

We’ve got to talk about swag up the business that Michael created. And so we’ve got the founder here going to talk about how he got into this business has been around since forever and still is doing massively with it, by doing it in a new way. And swag up is a company that. I guess your API first, but I don’t even know that I would call it API first.

What is it, Michael, that makes you different from other swag companies that create t-shirts pens and everything else with company logos.

Michael: Yeah, I th I think it’s been a progression that’s, you know, the, the way that we’ve been different as evolved over time, you know, it’s the initial stages. And the initial insight was just, you know, it’s one of those like super crowded markets where it’s so crowded that it’s not really differentiated. You know, so you have 30,000, so I distributors, but you really couldn’t call out the difference between what does this one do versus this one?

What, what capabilities do they have? They don’t have, it’s all kind of just this big group of resellers, just reselling the same types of items from different vendors. And, and maybe they have local expertise where they’re really good at selling to like local sports teams in Arkansas or hospital systems in Michigan or something.

But there was really nothing really different about the business. So the first, the first one was just, Hey, Startups like high growth companies loves. And, and if I’m running a high growth startup or just any startup, what is like the go-to company that you go to to get this stuff done? And I just couldn’t think of anyone.

You know, you have like stickers, you typically go to like sticker mule business cards. You typically go to move, but it was like, swag. Is this bigger category it’s over, twenty-five $30 billion. Market. And there wasn’t like this go-to company you have on one side, you have like four imprint and CustomInk and eat promos.

And like these kinds of discount mugs. And you know, some of these like very two thousands era e-commerce sites and you go on there and they overwhelm you with options, like 10,000 different notebooks and 5,000 different, you know, backpacks. And it’s all kind of like on you to do all the work you have to design it.

You gotta figure out what items to get, you know, if you want it to put together. You know, some sort of kit, there’s so many different logistical touchpoints along the way, and you’ve

Andrew: An incident, you said, I think if I could be the person who works with startups and get the way they think and become the brand that they think of the way they think about sticker meal for stickers, that’s the beginning. That’s, what’s going to separate. And then over time what’s that separation has evolved today.

What would you say it is that separates you?

Michael: yeah. And swag up is really the combination of startup and swag together. That

Andrew: that’s where it comes up. Okay.

Michael: Yeah, that was the naming originally because it was actually called startups swag in the very first few months. And then, uh, you know, it changed the name. Um, and yeah, and that’s how we got the initial traction.

And then we, we focused in on swag packs as like our, what I would call like the mousetrap or Trojan horse that helps us get in the door of these companies. Cause again, The logistical process of getting together like a new hire pack is like, you got to get the box here, the shirts here, the mugs here, get it all together, send it to like a three PL or get your team to kind of fulfill it in your office space or something.

So I was always looking like, what is the purple cow for us? Like what is the way that we can be remarkable. Um, and now fast forward to today, what we’ve learned working with these companies for like the last four and a half years now is. That the really tricky part is the supply chain. You know, it is the actual operations of handling custom bread and merchandise at scale, both the creation and distribution of it.

And, and in that sense, it’s like we had multiple opportunities to build like an employee engagement platform that utilize a swagger, be like ascend DOSO and build like a sales and marketing enablement tool that leverage physical items. But all of these companies, they want to build the interface layer, but they shy away from the supply chain there because it’s so difficult.

And we’ve found that the interesting opportunity is like digitizing the supply chain. It’s really archaic and ancient and building like a technical obstruction layer on top of it that other people can tap into. So powering the other swag businesses, powering the API APIs, that power, you know, uh, an employee engagement tool that utilizes swag for some reasons.

So being able to tap into the ability to create and distribute. So I just like tapping into the ability to create like a text message through Twilio and that’s the API first nature. And our CTO always had that. Foresight is to, you know, let’s not build just like an application. That’s build these API APIs and then build an application on top of it.

And that’s what swag up is, but it’s, you know, somebody could build a replica of, so I got today, if they really wanted to on top of our infrastructure.

Andrew: Uh, because if I wanted to create my own swag business, Idea that what I want to do is help co uh, businesses send products to their customers. As soon as somebody signs up for an expensive product for an expensive online experience, they should get a box of goodies from the company that they signed up for.

I could build that on top of swag up.

Michael: Exactly. Yeah, you can build, let’s say like a Stripe application that every time you acquire a new customer and they sign up for scription on Stripe over. $500. You know, Andrew Warner could build a business that is like the swag automation platform that sends them something. And it’s all built on top of our infrastructure.

So you don’t need to deal with the backend logistics and operations and figure out the suppliers and the fulfillment centers and how to capture. So that is really what we spend our time focusing on. Uh, we’re still very

Andrew: Let me come up with an idea here. So for example, all right, we’re just going to brainstorm Michael. And by the way, Mike will give you a revenue. So people get a sense of how big you are. They don’t think that you’re just like talking about the future without any substance or any accomplishments so far.

Michael: We’ll do over 50 million this year and we’ll do nine figures. Next year. It’s been four and a half years. We have about 180 people over 3,500 customers. And, you know, we grow a ton a ton every year. So it’s a, it’s a tricky business to run because of how logistically intense it is, but also the growth rate.

Andrew: Okay. So if I, if I were looking around at the NFT world today and I see the people are just selling art, and I would imagine that if they’re selling it for thousands of dollars, they might want to give a physical product to their customer. And I say, you know what, wouldn’t it be great if somebody could create a t-shirt.

That automatically like went out to whoever bought the NFT with the NFTs image on the shirt so that they could wear the thing. I don’t want to build the infrastructure. I don’t want to put anything in a box. I go, you’re smiling. As I’m saying this, I could go to swag up. And basically build my company on top of yours and create NFT swag or NFT, NFT, IRL, like NFT in real life, NFT, irl.com.

And all the NFT creators will come to me and they will have their stuff like sent out on product. Are you smiling? Because it’s a great idea. You’re smiling because it’s a bad idea or because someone’s already done it. Why are you smiling like that?

Michael: I’m smiling because it’s something we’ve been talking about recently over the last few weeks or the few different people in the crypto space about building something like this. And, you know, I think today it’s more of like, we’ll do some partnerships and help push these projects along, but in the future, it’s very much like open API where you know, that.

Applications are right there. The services are right there and people can, you know, people that we’ve never met before will build on top of our infrastructure today. It’s a little bit more of a controlled environment, but yeah, I mean, that’s the right, the right idea is thinking about all of the different ways that you can leverage our ability to kind of streamline and make really efficient, the ability to create custom branded merchandise and distributed at scale and where all the different ways that you can integrate something like that into other experiences and platforms.

Andrew: So you’re not really fully there as an API first company. You’re not a company that I can go and tie into tomorrow. Plus use Typeform for forms, plus use Stripe for payment and do the whole thing. No, this is the vision. The, the, the fundamental, the foundations of the business have been built with that vision in mind, but that’s not, where the bulk of your revenue is.

And your strength yet today is.

Michael: that’s not, it’s not like where we go to market. Now. The technical capabilities are pretty much there. I mean, like I said, It is API first, the architecture, how we build our systems are API first, and then we use those APS ourselves to build. So I got.com. Somebody could do that, but we’re not going to market right now is like, oh, like we’re all about developer advocacy and finding partners to build on top of us because we still have a very thriving, fast growing, like SWAT e-commerce business that helps us inform how to build those APIs and build their operations really scalable.

So it’s definitely the, the future vision of like where we see the growth opportunities in the future and how we try to. You know, differentiate ourselves from the existing. So I come because we don’t want to, I’m also a, uh, a growth minded person. I don’t want to try to compete with every single one of the distributors and, you know, increase our costs, uh, acquire customers.

I’d rather empower them to become more efficient and more scalable on top of our infrastructure.

Andrew: Yeah. Being the Twilio of swag of custom branded material makes a lot of sense. All right, let’s go back to when the school

Michael: all the time know.

Andrew: it’s what.

Michael: I said, why reinvent the wheel over and over again, set up your own warehouses, set up your own design team, set up your own one-to-one relationships between you think about 30,000 distributors and over a thousand suppliers. What is that like? 30 million one-to-one connections and nodes in a network, you know?

Andrew: Yeah. Yeah. And so you want to be the person who just organizes it all. And if somebody has got a really good connection into, like you said, the, uh, hospitality industry or the medical industry, they should just use you focus on their connections, use you to create the best product and have it shipped out to the customer.

Michael: Exactly where we get better.

Andrew: right. Right. Consolidate the whole freaking space. All right. You guys profitable?

Michael: Yeah, for sure. I mean, we’ve never raised money, so we have to be profitable. Uh, we don’t have debt. We have like one small little line that we have access to and stuff that we’re not really using. So, um, we try to, we try not to be too profitable because we’re trying to grow, so we’ll keep it at a pretty tight margin overall.

Um, but, but yeah, we’re definitely profitable.

Andrew: But you don’t take any money out of the business. Michael, put it somewhere else. Give yourself some security beyond the business business fails, like, you know, Elon Musk, you want to deal with it.

Michael: I paid myself like 50 K 60 K for the first, for the first couple of years, I don’t even think I took a salary. Then the last couple, it was like 50 K 60 K. Now we’re starting to get into like, being able to take more practical like salaries. Um, but we’re very, very, you know, into the longterm, um, you know, potential of

Andrew: last year, Michael, if you and I last year were going out to dinner, you would have a moment of thought about, can you afford your share of the sushi?

Michael: I mean, if

Andrew: that a thing? yeah,

Michael: I mean,

Andrew: going to go play poker, you’d say, what are the stakes before? You’d say who’s going to be at the table.

Michael: Possibly. I mean, when you own this and you’re bootstrapping it, you’re not fooling anybody. Like you want the best long-term outcomes. You want to maximize the value of the shares that you own in the business that you own. You’re not trying to do something artificially short-term to make investors happy, or, you know, I, I always find it kind of weird when either founders.

A lot of money off the table, or they pay themselves a lot or they invest on the side because I it’s like a diversion of focus away from like the biggest investment you can make is in yourself and into the business that you run. And that’s always been our mentality for the first four and a half years.

It’s like maximize the value of. Of our ownership in the company. So, um, we’re, we’re very, and we’re even just made a big decision where we’re moving from LLC to C Corp, which even further enforces this ideology of not taking money out of the business. Because if you take money out of the business, you’re going to get double taxed on it at the corporate level and the personal level.

Uh, so we’re, we we’re making decisions now that get us even further kind of locked into the long-term success of the business.

Andrew: The idea came to you when a friend of yours had an app that he was working on and what was he trying to do?

Michael: Yeah. So it kind of came. I learned about the industry through this serendipitously. So he, you know, he can’t, he comes to me, I went to high school with him and then we went to different colleges and he’s like, Hey, I have this idea for an app. And I want to find, you know, I’m always trying to find like people to play basketball with at Rutgers.

And like, you know, I don’t know where to find them or how to communicate with them. So like, let’s build a location based social network. And this app, you know, a lot of people have tried building apps like this and basically was like, Build an app and you can post on there, like, Hey, we’re playing basketball at 6:00 PM at this park.

You know, people can opt in, they can have a chat, they can see the location, all that kind of stuff. And it’s like an, I, the idea of finding people that have shared interests, uh, that are in the same location with you, so that you can meet up with them. And the app was fine and we did a launch party and all this stuff on campus.

And, uh, we used an outsource Indian development firm to put it together. But in the process of, of promoting it, uh, at my campus, I was like, I want to get custom flags and put them up in dorm rooms, like Barstool sports was doing at the time. And I couldn’t find a supplier in the U S to make these. That were less than like 130, $140.

So I, I do some digging and I find a supplier on Alibaba and I’m, I’m able to get these fives for like eight or $9 from overseas. And they’re done in like three days and shipped in two days. Like, so it’s like within a week you can get a flag for all in like 20, $30, including the shipping at like a seventh of the price of, of the U S supplier.

So it’s like, At them. In the meantime we have this app, why don’t we just get a little website going? And we call it a cheap, custom printing. And we just sold like custom flags and banners at the time. And, and that was kind of my first foray into understanding the different suppliers and, uh, you know, the, you know, the networks of suppliers that you can tap into for some of the other types of products.

So it wasn’t like, so I just immediately started after that, but it was always in the back of my mind, like, there’s this market here and it’s interesting and there’s arbitrage opportunities, and I know how to find the suppliers to get these items.

Andrew: Did you make any money with that first version?

Michael: Nothing crazy. I think, I think we’re probably doing like 40,000 a year or something, you know, 30, 40,000. And it was mostly. If you’re not differentiated, like what, why are people going to care? You know, if there’s 30,000 different like custom printing distributorships, like who’s going to go to cheap custom printing.

Like, what’s so great about that website. What’s what is new and different and innovative. So when I started swiping up, it was always like, you know, I mentioned the purple cow, this, the Seth Godin book, like that’s one of my favorite books of all time. And the idea is that, you know, if you were to walk by a farm and you saw a purple cow, like you’d immediately be like, holy shit.

Like I just saw purple. Like, I’ve never seen a purple cow and then you’ll immediately like call somebody like, dude, I just saw a purple cow and, and that his ideology is like in this world, that’s super, super hyper connected. And there’s so many distractions. Like, unless you’re a purple cow, you’re just going to be another, an also ran like nobody will know about you.

Nobody will care about you. So how can you build this? Remarkability into the product itself. And, and that was the idea of focusing with startups at first. But I was like, fucking with startups is not. To be a purple cow. So that’s when we started focusing on like the swag packs and that was very noticeably different than any other company out there.

So

Andrew: get to swag packs, why did, why did you come back into the business? Where did you ever leave it?

Michael: I always like had it because like, when you have like those online businesses and stuff, it’s like, you might as well just keep the website going. It’s not like I put much effort or marketing or money behind it, but it was always there. So like, oh, we get a few orders every week and fulfill

Andrew: then you just send them to the person in China who you had, who would then ship it directly to your customer.

Michael: We typically ship them straight to us and then reship them just cause it didn’t look that super presentable when they come over from China. And also you, you know, you don’t want to have to ship one by one to different people. Cause it will get too expensive. You’re, you’re better off aggregating the volume for like the week and then shipping it to one spot and then distributing it.

Andrew: this was just a thing that was in the back of your, not in the back of your mind, but you were working on it, but not really. It was producing. And then at what point did you say, I think I could put more effort into this and create a branded experience. What made you go.

Michael: There’s a lot of steps between that. So it was end of sophomore year where we launched that app and came up with that concept. And I always say that that’s kind of like the catalyst that got me reignited into entrepreneurship because I was always an entrepreneurial kid growing up. And then I got really like tied into finance when I was like 13 to 19.

Like I bought my first stock. I ha I intern at a hedge fund and stuff. But then the launching this app, I got back into like this entrepreneurial mindset. And then from that moment on, it was like, you know, my interest in school just totally fell off a cliff, you know, because first off I didn’t really want to be there to begin with.

And then when you start to get into like starting businesses again, you’re like, why am I at school? Like, what is school going to do for me? So I ended up dropping out junior year, midway through, uh, I was at William and Mary in Virginia. Actually I had, I had an opportunity lined up to join an NFL player.

So like totally different and weird, you know, this guy, Steve Weatherford play for the New York giants. And he had just gotten out of the NFL and he was known for being this physically fit punter. And he wanted to transform my kid’s post career into like a fitness business and a fitness personality. And I basically joined up with him and became his business partner and helped him launch fitness training products.

Create content and help them like get off the ground and building like this career outside the NFL. So that was, that was like the next step. And then after about a year that I joined a VC firm in New York city for a little, and that was around startups so much. And I kind of just put the two and two together, like, you know, my understanding of the swag world a little bit in supply chains and seeing how rabid people are in the startup space around swag and just putting it together and just seeing, okay.

I put up a Wix website and some other stuff, and just wanted to see if there was interest and there was, and then it just snowballed into a much bigger thing over time.

Andrew: How’d you get people in the startup space to notice.

Michael: Yeah. Honestly, I think one of the best ways that you can actually test assumptions is by doing random Google ads, you know, to random people to see if anyone actually cares. And if the messaging resonates, you know, it’s, it’s, it’s easy to go to like friends and family that have businesses and be like, Hey, will you buy from me?

And they’ll buy from you out of pity because they want to help you or something, but it doesn’t necessarily validate that there’s actually product market fit. So when I got the Wix website up. It just literally put random, I put Facebook ads and Google ads, Facebook ads sucked. It was a bunch of like really small businesses and unqualified traffic and stuff like that.

But the Google ads are actually bringing like legitimate companies that I had heard of. Like the first one that I remember was Soylent, like the meal replacement shake company, that a lot of people in Silicon valley were drinking. Uh, You know, and after a few more weeks, so we’re getting like some more legitimate companies.

And then we got one of our first large orders for $10,000. And I say, we use really just like, kind of me by myself. And I brought it, some people that lived in my town to help out eventually, but, you know, had an, had an order for $10,000. It was like the biggest single transaction that I had ever seen, like running a business before, you know?

Cause like I said, that that cheap, custom printing thing was doing like maybe 30, 40 K a year. This was a $10,000 order. And after that point, there’s definitely something here. Like we’re going to dive to.

Andrew: And the website was targeting and speaking to.

startups, how, what did you say on it that made them feel more comfortable?

Michael: I think first off, if you go to like our site today and you look at it, there’s a clear difference between how we kind of like design. Position ourselves. Like, you know, one of the things that I always would say is like, when you go to these there’s two types of companies in this industry, you have e-commerce sites and you have agencies, the e-commerce sites always look like they’re from like 2003.

And on the agency side, it’s a lot of like walled garden type stuff. Like you go there and they kind of list services, but you can’t do anything. It’s just like a. Contact form in a way. And I was like, if we can take the nice self-service, you know, information upfront of an e-commerce experience, but then layer in the services of an agency and then design it, uh, in a brand that resonates with startups.

Like if you go to Stripe’s website, you go to Toyota’s website, like they have the same feel like they’re very innovative and new and modern and. The swag up experience, feel like the types of experiences that they’re used to using the types of software platforms they’re used to using. So a lot of it was just like being very into like the design and presentation of how we do things, but then also making it self serve, like where you can actually do something.

When you go on the site versus constantly being pushed to talk to sales reps all the time.

Andrew: Right now when you do it, it just looks beautiful. I can actually see the box. I can see what goes into it. I can add it. But when you were just doing it on a WIC site, how could you create that kind of experience?

Michael: Yeah, the key was typed form. I had used, I learned about Typeform in college. I don’t know, maybe I was doing a school project or something, and Typeform has always been really interesting to me. Cause it’s, it’s a way to create beautiful looking forums. Like if you go to like Google forms or something, they’re really ugly, you know, they’re just like, you know, question one, question two, question three, very like utilitarian.

Whereas Typeform was like, let’s take people through these guided experiences, ask them question one, then get to question two. And you can build these logic trees. Like, Hey, if they say yes or no to this, show them this question. So it was just much more dynamic and visual of an experience. So I built the first version of the PAC builder leveraging a type form that was dynamic that said, Hey, do you want mugs?

Yes or no, if yes, show them the mugs and then you pick them up and it’s like, great. Would you like to add a backpack to your pack? Yes or no. And it was good enough to build a pretty solid experience. And it was, you know, they have frames type form where you can make it look like it’s kind of natively on your site embedded there.

So it felt very S uh, you know, native for people and pretty.

Andrew: I think the logic being built into forms is just such an underutilized superpower to ask someone a question And then follow up with them with the next question that’s built on what they said in the previous question. It’s, it’s a pain sometimes to create, but it’s so powerful and it’s, it’s not that much of a pain to build.

Michael: And it’s cheap too. That’s the main thing is like, there’s so many of these tools out there, especially if you’re like at the startup phase or a single user, there’s so much software, that’s like $5 a month, $10 a month. 15, I think at the time was maybe 17 or $19 a month to host the website. So as long as you’re able to like put in the work to learn how to utilize them, they’re pretty powerful.

They get you off the ground. Like we didn’t, we didn’t stop using Wix type form and Trello and Zapier until we’d done like $6 million in sales.

Andrew: Wow. So the way it would work is someone would go to Typeform to put the order in. Did you add Stripe to the type form?

Michael: No, we never, we never would collect the money up front just because there’s so much involved with getting these orders placed. You know, it’s not just like, oh, I want this item this time. There’s the whole design process and the quantities and, and all that stuff. So we weren’t ready to like, have a fully done yet.

You know, experienced there, but so it was a Wix website. You have, you have type form kind of embedded in it. And then you have Zapier, you have Zapier connecting that to different experiences. Zapier would push that into slack to be like a notifications feed, where the cup, you can just see, oh, this lead came in, this one, this one, this one, and here they picked and then it would also push it into Trello.

So Trello, it would be like the project management tool that we’d use. You know, to monitor all these orders. And basically that would automatically get assigned to like our design team. Our design team would see the request, which items they picked, you know, here’s their logo. They would design them, upload the file of like the mock-ups.

And then we create like a pricing sheet and then move that Trello to like, you know, the scent stage and we’d send it out to the client. And, you know, so we, we use that as like our initial project management kind of workflow and it, and it worked. And then we use like QuickBooks just to keep track of invoicing and all that.

And it was enough. It was, I think that the bar was pretty low in this industry in terms of what people were used to. That that was enough to make people pretty happy, you know? And it was enough for us to operate at a decent.

Andrew: That’s $6 million is what it got to with this process.

Michael: Yeah, we didn’t, we actually didn’t launch like our custom built ERP, like backend and our front end. Like, so I got.com until like 2019, February, like February is when we launched the ERP in may, was when we launched the new website and got off of WIC. So it was, it was two years into the journey, basically that we kept staying on that same path, you know,

Andrew: What’s ERP.

Michael: Enterprise resource planning. It basically, it’s just like a backend system that keeps track of accounting and your product skews. And. So we actually ended up building a custom system on top of Salesforce. I guess the typical ERP is NetSuite or SAP. Like those are the big costs or like, you know, vendors in the space.

But we decided to skip that route and use Salesforce because it’s very flexible. And we had developers on the team that could kind of custom tailor that URP to like how our businesses.

Andrew: I’m going to talk about HostGator, my sponsor. And I want to talk to you about it because let’s go back to that idea that I had. Imagine someone’s listening to us and says, you know what, I’m gonna sign up for HostGator account. And I’m going to create a site that feels right for the, uh, the NFT crowd. Go into the discord rooms, have conversations, find customers there.

And offer let’s say not just t-shirts, maybe it’s t-shirts maybe it’s I think it would, it should be some kind of NFT skateboards would be interesting, especially when we’re looking at higher end products and they may be use a type form to take these orders in from new NFT created. And as soon as the order comes in, they send it over to Trello the way you did, then they get on a call with the person who signed up and once they get that order, they invoice them.

And then they send the order to you by logging in, by talking to a rep at your company, it’s wag up. Do you think that hosted on HostGator, do you think that would work as an initial business to maybe get the first year up and running?

Michael: A hundred percent. I mean, especially given this space is so hot, you know, NFT space, there’s money in it. There’s so much capital. And the thing is too, like when you leverage. API APIs and these different tools. There’s not a lot of upfront work that you have to do to be able to test and validate the assumptions that you have, you know, in the past, if it was five, 10 years ago, just setting up a basic website or having a form tool like Typeform was custom development and being able to deal with the suppliers.

That you’d have to invest a lot of money and time to even see if you can get your first order and in today’s world with all these tools, like you can test your assumptions very quickly with not a lot of capital, like even, even it start with. So I go, I didn’t, I only have like 30 K in the bank when I started the company and we didn’t, it didn’t really actually cost much money to start.

Andrew: Wait, the 30 K come from.

Michael: Just some money that I made. Like one, I worked in high school. I was a bus boy at a pizza restaurant. And then I also worked at another pizza place. And, uh, I was a waiter for a little bit. So I had a little bit money still saved from that. And then, you know, I made some money with the NFL player for that year as well.

Um, some of the time that we were together, Actually, I actually almost wasted money on a, on a WeWork space in New York. We had a lease for like a year. It was like four grand a month. And it was such a waste that I rarely went. Yeah, it was, it was a bad decision. One of the, one of the, one of the worst decisions, but nothing against we work, it was just a waste of money.

Andrew: Yeah, I that’s painful. I’m in a way we work right now and now they’re like $10 an hour in half hour increments that I could book. It’s it’s amazingly different.

Michael: it was like 10, 10 by 12 maybe. And it was like four grand a month. I shared it with a buddy of mine and we split the rent, but it was pretty, it was pretty pricey.

Andrew: All right, let me come back And close out this ad for HostGator. Listen to people, whether it’s that idea. Anything else? When you need a website go to HostGator, not Wix, go to HostGator. And the reason I like HostGator is because you have all these different themes and designs and designers who are already building on top of, on top of not host Gator.

On top of WordPress, all you have to do is go into that pool of resources. Pick your design. Build on it and then hosted on HostGator. In fact, HostGator makes it super easy to get started. And then of course, once you get started, you can pick a theme from anywhere, put it on, adjust it the way you like it.

Hire developers, hire designers, if you want to, but frankly don’t even bother. Keep it super simple. And if you’re not happy with those Gator, because you’re doing it using open source software, you can take your, your content anywhere else and just have it hosted there, or show what you’ve built already to develop it and have them build on top of it and adjust because it is such an open source platform.

That’s so well-known go to hostgator.com/mixergy to give me credit for sending you over. And frankly, by, uh, using that URL, you’ll also get yourself a nice discount on their already low price. Here’s that URL again? hostgator.com/. Thank you HostGator for sponsoring, by the way, we, I asked you where you got your 30,000.

Oh, sorry.

Michael: And I remember seeing them at tech day, New York back in, I think it was 2018 was one of the first conferences that we ever went to a company. And I remember them, uh, being one of like the bigger boots there back in the day.

Andrew: Yeah, they’ve been around forever. They basically ended up one of the last people standing. Then they got acquired and now they got acquired again. My, my, uh, my contacts over there. I don’t think our at-home skater anymore because the company just got acquired, I think by private equity firm, that basically there’s either there’s Squarespace, Wix, or if you’re going to do WordPress HostGator or the company that, that owned them with all their other brands.

Basically the last, uh, last man standing and yes, I know there are all these, uh, other players. If you want to get super geeky about it, you can get into it. But the company behind gate or whatever they’re called now, basically acquired just about everyone except for managed WordPress for managed WordPress.

You have, they do host, HostGator does manage WordPress, but they, uh, th but wordpress.com does manage WordPress hosting. And I don’t know why I’m going off on this tangent. What the hell am I doing here? Let me come back to you. All right. Speaking of the $30,000. From what I understand, you were incredibly entrepreneurial as a kid.

You literally had a lemonade stand

Michael: Yeah, for sure. I mean, I have a. I spoke when I was like four years old and I have this stand that had lemonade and had yogurt. And I used to basically, when my mom would go get groceries, I’d come, I’d go see what she picked and then bring them back outside and try to sell them to, to our neighbors.

Andrew: right outside your house.

Michael: Yeah. Yeah. So the cost of goods sold is favorable. Um, there’s this picture? It’s just like, it’s kind of like iconic. They actually got it for me for my birthday on a cake at the office one year. And I’m just like on the phone, I have like no shirt on I’m like four years old and you can just see my stand there.

And I just, it’s just like super funny. Um, but yeah, I mean, that was just one of. Tons of things. I mean, I used to buy and sell, uh, baseball cards. I was like one of the early users on like YouTube, where we used to an unbox, a baseball card packs and stuff. And I was on eBay buying and selling some stuff.

And, you know, even when those like hoverboards came out, like eight years ago, I got a little business called selling those hoverboards that people like locally in New Jersey. So I was always looking for ways to like make money. Um,

Andrew: What’s the best little business that you had. Mine was selling sandwich.

Michael: I mean, I think in terms of like actually making money, it was those hoverboards. Um, you know, we probably did like a hundred K in sales and like a year or something like that. And I was like 17 or 18 at the time. So that was a pretty successful one. But I used to do stuff as simple as like taking the, this is like five years old, six years old taking the tissues in my.

And folding them into, to go packets and then trying to sell them to like, and we at the dinner table, like when they’d come over, like, Hey, here’s a dollar for like a, to go packet of tissues. So there was always something.

Andrew: I sometimes miss the simplicity of those days. I took my kids to sell lemonade and I just love the simplicity of it, of just standing on a street, saying to someone, do you want to buy lemonade? Having the guts to speak to a stranger, being able to go and pitch the next person after the first one. Blows past you.

I actually set up my action camera for the whole day to record. And when I went back and I, I saw it, there were just a lot of people who blew past us, but it was fun to just keep trying and trying and trying. And then once a few people stood in front, others came and bought and it was, it was exciting.

And I love the simplicity of that.

Michael: It’s also the Ameritocracy of it is pretty good too. Have like not, everybody’s going to want to come and buy your thing from you, you know, and not everyone’s going to feel bad for you because you’re a kid that is doing something, you know, it’s like, that’s like setting people up for the real world of like, you know, you have to adapt and evolve and it’s not always going to be, um, you know, that people are just going to hand you money because you’ve started something, you know,

Andrew: I keep thinking about how Paul English, the founder of kayak says that he wants everyone on his team to have some kind of side project. And I feel like that’s what he’s trying to tap into. That creativity that comes from having something simple that your life doesn’t depend on, where you can go and explore the fundamentals of business or programming or something without all the overhead and all this significance.

Michael: It’s hard to have the context when you don’t have skin in the game, you know, like until you’ve been in that situation where you have some skin in the game and you start to understand, like, why people make certain decisions or why business leaders make certain decisions. Um, but I’m a huge fan of like people on the team having some sort of side hustles or podcasts or whatever.

It might be like. One of the interview questions that we have on our job application is what is like something that you’ve started recently or a side project that you’re running. Because I think it shows not only a lot of initiative and like the ability to get something completed, like where you actually launch it.

But it’s just like this curiosity and creativity of you’re diving deep into something, because you would just innately want to, like, nobody’s telling you, you have to do it. And I think that that’s a huge, beneficial characteristic to have as an employee. I know that sometimes like business owners are a little squeamish of people like hiring people that have like entrepreneurial tendencies.

Cause I think they’ll like compete with them or something or they’re going to leave and start a business. And I’ve always found that to be a weird mind.

Andrew: I guess they feel also that the person’s going to care more about the business than they care about the job, but people care about their kids more than they care about the job, but they’re able to put those thoughts aside in order to be present that. So I,

Michael: I think people either pair, like they just innately care and have self worth and they, they want to maintain a certain level of quality and everything they do, or they don’t, you know, and just because I’m really ambitious and have a side hustle, I wouldn’t be able to have like the willpower to not give it 110% in anything else that I do.

And I think that those types of people are always going to put their best foot forward in anything that they do, because they have pride in what they’re doing, you know?

Andrew: yeah. Oh, now I’m thinking, can you do a swagger of NFTs? Can companies give their people NFTs to show that they’ve been there? Keep collecting these. I’m kind of like deep

into the NFT world.

Michael: NFTs is like a redemption process that gives you this token that says you have ownership of this NFT and you’ll invite using a, you can go claim your physical version of it or something. Uh, you know, it just proves physical ownership. I mean, there’s a lot of

Andrew: part’s exciting. Yeah.

That way it becomes where there’s utility and not just art is where I get really curious. I created a side podcast just based on. This a decentralized blockchain based social network. It’s called diesel and they’re all into NFTs and I’ve been talking and interviewing people there and just getting lit up with all I all kinds of ideas.

Michael: I think the idea of like intellectual property that. You know, embedded within itself and the contracts like ownership rights is really interesting that you can tie back to for the course of time. It’s like if Mickey mouse was created as an NFT, that you can have micro ownership of and anytime Mickey mouse’s likeness was leveraged in the future, it ties back to that.

If he, the NFT, I think there’s a lot of interesting stuff you can do there. Like you can like, you know, board a yacht club or whatever it is like, you know, if they start building television shows in whole entire your Metro versus around this concept, you know, and everything is tied back to the intellectual property rights that you have is like an NFT owner.

Like there’s actual real value off of that. You know, I, I always try to tie things back to what is the future cash flows that this thing can actually generate because. Provides value, you know, in, in the real world. And that’s why I’ve always been like an Ethereum fan versus like a Bitcoin fan, because a theory of is actually can be leveraged and programmed and, and build real utility and value on top of it versus just being a store of value, you know, and you can work backwards to get, you know, actual value out of it.

Andrew: So couldn’t you be, if you are interested in turning NFTs into t-shirts or products, couldn’t you create it.

without even. Without even the creator giving you permission, they don’t have to bless you. You just create a site and anyone who actually has a board ape can just go to your site. And if they prove that they own it, they could get it delivered directly to them.

You don’t need their permission. It could be its own standalone thing where the creator of the NFT doesn’t do it. Right. The individual owns it. All they have to do is, and if you create a brand where you are now associated with authenticating before printing and shipping, that’s kind of interesting and you could definitely authenticate somebody ownership of a thing.

And then you could only if they own it, could they get this branded swag of the product, otherwise, forget it. And the way that you know it is because you’re, you’re going to put your own, like your own logo or your own whatever certification on it. And now.

Michael: And service, like the little holographic

Andrew: Yes. Right,

Michael: MLB licensed apparel or something. And then you just have met a mask integrations to know, does the person actually have ownership of that NFC in that, you know,

Andrew: right. I feel like there’s a whole

Michael: you can tell we’ve

Andrew: here.

Michael: always thought about it a little bit.

Andrew: You’ve thought about that too. Like not even going to the creator then Ft, just creating a, uh, an entry point for the owners to be able to create their own swag of, oh, this is a good idea. I see you getting serious about this. Like you’re you don’t even want to be talking about this.

Michael: Parts about entrepreneurship though. And I’m, again, I’m like this abundance mindset person. Like whether we build it or someone else builds it, I don’t really care. It’s a big world and there’s a lot of opportunities and if they can build it on top of our infrastructure even better, you know, that’s, that’s great.

But the thing about entrepreneurship too, is like, I only started to build a big company when I got fired. You know, I, when I was younger, I thought like, I felt pride in having lots of businesses. I w I was like a 19 year old person. I was like, oh, I have this old business and this business. And I partnered up with these people on this.

Like, you just take all these opportunities that come to you and you get like, excited by them, but you don’t really ever build anything of substance until you start to focus in and really get great at something. And that’s what, so I was like, so I go up as the first time that I did. Every other distraction and just actually focused on it and said, okay, I’m going to give this its best shot.

And when you do that, you start to uncover the things that other people don’t uncover because they don’t dive deep enough to really fully understand it. So you gotta, you have to be careful.

Andrew: that this was going to be your focus?

Michael: Just because of the initial attraction, I think that we’re getting and, and just knowing how big the market was. Um, and, and just the evolution of the vision, you know, it constantly makes it feel like we’ve only scratched the surface. And I know a lot of people say that like, oh, we’re just getting started.

We’re just scratching the surface. But like it’s when you do find something really great and you have traction, it really is just the surface because when, when you start to get customers and revenue, The whole big thing is like category expansion and moving into new opportunities. Like, and, and like, look at Stripe, the reason why they just keep getting bigger and bigger, it really is day one for them, because in their position, they can go into so many different areas now.

And, and, and, you know, you can basically build like this conglomerate at that point, though, of anything you want because you have the capital and know-how and credibility. So that’s how I think. It’s the foundation or platform of us building lots of other stuff, um, you know, on top of it. So it’s always interesting.

Andrew: So one big milestone was obviously just getting started. Another one was going after startups. It feels like one of the bigger, one of the next big ones was not selling a stack of t-shirts. But instead saying you could have a box of multiple products with your logo on it sent out to your people, right?

How did you come up with that? Mm.

Michael: Well at the time, it wasn’t really a thing. You know, if you, the only way you’d find like swag packs or something was like on Pinterest, if a really innovative, interesting company, it was like doing it for their new hires or something. Um, and so I was like somewhat aware of the concept and it wasn’t really popularized, but then that $10,000 order, that first really big order we got, it was actually the customer that was.

New hire swag packs. They said, Hey guys, can you put together, you know, this kit with everyone gets the shirt and everyone gets the notebook and everyone gets the bottle in the sweatshirt. And I was like, sure, but it got me thinking of, well, what are all the ways that people could leverage swipe facts? It could be new hires.

It could be investors sending it to their portfolio companies. It could be, you know, getting people in the funnel to convert. Like there’s so many ways that you might want to leverage it. And it’s so difficult to put it together, like in the pre. So I got world. It was a very challenging to put together a new hire pack, distributed out to people.

You’d have to kind of piece together, a lot of different parties to make it happen. And it could be a multi-month process.

Andrew: Meaning they would go and have the products from multiple vendors created, sent over often to their own office. Someone would then get a box from a, from another company. They would put it together. And then when somebody signed up to work with them, they would mail it out from their office. That’s the way that they would do it.

Michael: Yeah. And that’s also like discounting the whole front end of the process of like, which vendors do you even go to that are high quality, which products of millions that they offer. Should you even use? How do you design them? Like you have to have your own design team make it. So we tried to cut the friction out of each of those steps and consolidate it into one, put out like one product in one platform.

And it just resonated with people right away. And it was a little bit of a bet. You know, I remember specifically as the summer of 2017, like we started may of 2017 and it was like July or August and I was going for a run. And I was like, we, I think we just have to focus on swag packs, you know, like, and we have to say no to like.

Bulk idea. And it’s not that we said no, like Marcus that way, but like sometimes there’s a eliminate like subtraction addition by subtraction, by not murking the waters by being everything to everyone. And just focusing on this thing actually will grow a lot quicker and any worked out that was the catalyst for us, acquiring a ton of customers really quickly.

Andrew: Yeah. And then it seems like at that point, your website shifted to. To emphasizing that to the point where today, I wasn’t sure if you are, if you offered individual products. All I saw was a swag pack.

Michael: it’s still, it’s still very targeted around that messaging, you know, because there’s a difference between what you do and how you acquire customers, you know, and you have to think of the funnel from end to end, you know, versus like you can have a marketing site that says you do everything, but is that the most efficient way to acquire a customer?

Maybe not, you know, not to say that that’s the best strategy. I think over time, our messaging and positioning will evolve with the functionality and capabilities, but there’s also an exercise in branding of, do you even want to keep that under the same umbrella or do you want to separate that out to more focused sub-brands that, that have different, um, you know, different product offerings.

Andrew: Yeah. you’re saying. We might be able to do anything in swag, but if we say that on the website, people are not going to pick up on what we do and what makes us special. If we feature the one thing that we want new customers to know us for, then we’ll be differentiated. We’ll get people in the door and we can always do the other stuff also, but we need to pick the one thing that, that they should know about us.

Michael: Yeah. I mean, when somebody lands on that site, you, you have a few seconds to get their attention and they need to know what do we do different and how are we going to make it easy for them? You know, versus

Andrew: Yeah.

Michael: I hate going to restaurants where they have a menu full of 10 pages. 300 options. You know, I wanna, I, ideal restaurant is one page and there’s like three appetizers and three pastas and two entrees and like a dessert, you know, cause I don’t want to have to pick it’s the paradox of choice.

There’s that book out there that says more is less, less is more, you know, and I think that’s really important is how do you eliminate decision fatigue so that people can make the decision you want them to make. And then once you have them as a customer, you have that Liberty to, to change their mindset and help expand and broaden their horizons.

Yeah. What value you can provide for this?

Andrew: All right. I can see, I can see that now. I understand your website’s so much better with that in mind, because I could see why, for example, your, your listing Zapier’s and integration. But not, not featuring it, not feature it in the API part of the business, which my team put together at the top of my Google doc.

All right. The website is swag up.com. I feel like there’s so many ideas that have come from this. Um, I hope to have you back on here, especially if you end up running with this whole NFT thing.

Michael: Yeah. I mean, Hey, if you want to be a partner and help execute on it, feel free. We’ll we’ll help empower you.

Andrew: you.

know what I, I’m kind of thinking maybe I do that. And the reason that I would want to do it is because a lot of swag is just bull. It looks so ugly. I have a t-shirt that I sleep in because that’s, that’s swag from a friend of mine. It’s so bad. I won’t even say it. It’s all I usually like to talk about this stuff, but it’s not going to benefit anyone to talk about it.

I just say it’s just such a squarely looking shirt that just looks like a Haynes from the 1980s. I don’t even like sleeping in it. Cause they say I’ve got to sleep next to my wife. She’s got to at some point, want me, you know, and she’s looking at that. There’s no way she’s going to Andrew. Can I just make out with, you know, it’s just, but I wear it because I just, I liked the people, but

you don’t know what the crap stuff.

Michael: the curation of stuff that people actually want, you know, is important. You know, you don’t want to be showcasing things that people are going to get in there. Like, why did we buy this? Like, why are you even offering this? You know? And that’s, and that’s why you get, if you go to a four imprint or customer.

Here’s everything you can possibly do and you need to make the decision that makes sense for you. And, and I get it. Cause sometimes people do just want the cheap t-shirt. Cause it’s like for some other use case, but we try to steer people out of that by curating the selection.

Andrew: I did that. There was a period when I was doing the Mixergy interviews video first. And so I thought, well, I’m doing the video. I’m always drinking tea while I talk, like you saw it, you notice that even though I was trying to hide it from you, it’s like we work all over this fricking mug. I hate that they have to brand themselves that much. But what’s what I thought was if I’m drinking all the time, people are standing on my face the whole time they’re watching the interviews, which was a thing back then. I don’t, I have deemphasized The video. Maybe I should have my sponsor’s logo on my mug. And so we went to one of those sites that will do custom printing and someone on my team did it and I shouldn’t have even held a mug.

It was just too, too pixelated to black. Blurry. Yeah. And then why can’t they signal to him that it’s going to come out blurry? So I did it for a couple of interviews and stopped.

Michael: The issue with on-demand printing type companies like Printful and print defy and all that as this, those, the capabilities that you need to utilize to offer on demand production are not usually the ones that people actually want. You know, it’s, you know, DTG and digital printing methods that are not super high quality.

Uh, they’re getting better. And then, and then also it’s like, how do you educate the user that the logo they’re using is not correct without having people involved in the process. So it’s a hard thing to scale, uh, with high quality,

Andrew: All right. I like the quality of your stuff. It’s a swag up.com Andrew guys. Decky thanks for making this introduction and thank you to the sponsor of this interview. HostGator. If you need a website hosted, go to host gator.com/mixergy. Thanks everyone.

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